Masayoshi Son's $58 Billion Alibaba Payday

 
on May 08 2014 5:04 AM
Masayashi Son_SoftBank
Softbank Corp President Masayoshi Son speaks during a news conference in Tokyo on July 30, 2013. Reuters/Issei Kato

Japanese tycoon Masayoshi Son has made billions of dollars from his investment in Chinese e-commerce giant Alibaba, prompting some to call him "the Warren Buffett of Asia."

Son's SoftBank made a $20 million (£11.8 million, €14.4 million) investment in Alibaba 14 years ago, when the Chinese Web portal was in its infancy. The company became the biggest e-commerce group in China and just filed for an initial public offering in the U.S., expected to be the largest IPO ever.

At present, Alibaba has an expected valuation exceeding $160 billion, and SoftBank's 34.4 percent stake in it is estimated at $57.8 billion, according to Bloomberg's calculations. Even Alibaba founder Jack Ma and his fellow executives, and venture capital backers like Silver Lake Management, do not stand to match Son's return on investment, Bloomberg noted.

The deal further enhances Son's reputation as one of the world's savviest investors and provides more capital to a man on the hunt for deals.

"The guy is the Warren Buffett of Asia," the news agency quoted as saying Greg Tarr, managing partner at seed fund CrossPacific Capital in Palo Alto, California.

"In venture capital, the way we measure success is how much was put in initially and what's the return. Every now and then you have something worth 500 times, like a Twitter or an Alibaba."

SoftBank was founded in 1981 as a software retailer, and is now a phone company spanning two continents. In the U.S., Son acquired carrier Sprint in July 2013 to compete with top players Verizon and AT&T.

He is also interested in acquiring the majority stake in T-Mobile US and European wireless operators.

Outside the telecom sector, Son made an $8.5 billion offer for Vivendi SA's Universal Music Group, but was rejected. Following the IPO of Alibaba, SoftBank will keep at least a 30 percent stake in the company and claim a board seat. Alibaba earlier filed an initial prospectus for a public offering of its shares in the U.S. The company said it is seeking to raise $1 billion in the IPO, but the actual IPO amount is expected to be significantly higher.

by Jerin Mathew, IBTimes UK

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